In a recent IPO, the Sausage Co. offered 1.8 million shares of stock at an offer...
In a recent IPO, the Sausage Co. offered 1.8 million shares of stock at an offer price of $15 a share. The underwriting was conducted on a best efforts basis with a spread of 8.5 percent. The Sausage Co. received a total of $21,079,868 in sale proceeds. How many shares were sold? Group of answer choices 1,508,428 1,349,453 1,535,874 1,505,746 1,498,256
Homework Answers
Number of shares = [Amount Received / (1 - Spread%)] / Offer Price
= [$21,079,868 / (1 - 0.085)] / $15
= $23,038,107.10 / $15
= 1,535,873.81, or 1,535,874 shares
Hence, 3rd option is correct.
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In a recent IPO, the Sausage Co. offered 1.8 million shares of
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